Looking out for the details

Groups hire management firms to perform jobs large and small

January 04, 2007|By Jamie Smith Hopkins | Jamie Smith Hopkins,Sun reporter

Thomas C. Shaner spends his days running the American Institute of Floral Designers. And the Professional Grounds Management Society. And the Maryland Association of Mortgage Brokers. And a few more to boot.

It might seem like an unusual amount of daily variety, but that's association management for you.

Groups hire Shaner's company to do the largely behind-the-scenes tasks that keep things going, from writing checks to organizing conventions to coordinating political lobbying. His office in Baltimore's Federal Hill doubles as their headquarters. His telephones are their telephones. His employees are designing their Web sites, editing their newsletters, reminding their members to send in this year's dues.

More than 4,600 organizations worldwide have hired association management firms to run their operations entirely or to handle certain duties. Business, trade and professional associations are typical clients, though some foundations and other groups are in the mix, too.

Such managed organizations represent a fraction of all associations - let alone all nonprofits - but the industry is growing. The number of clients increased 55 percent between 2002 and last year, according to the AMC Institute, an association management trade group.

And the number of firms that do this work has more than doubled in the past 20 years, to about 680. They're in 48 states and 11 other countries.

"The business model makes sense, and I think there are more and more opportunities," said Sue Pine, executive vice president of the AMC Institute - which itself is run by an association management company. (Pine works for the 120-year-old Fernley & Fernley Inc. in Philadelphia, which says it is the oldest such firm.)

Companies see potential clients in groups with a very small paid staff; all-volunteer organizations that have ballooned in size; and large nonprofits that want to outsource some work, such as trade-show planning.

The Maryland Optometric Association contracted with Shaner in 1987 when it lost its executive director. G. William Seabold, who was treasurer at the time, remembers it clearly because he was against the idea. One firm running multiple associations? How well would that work?

"But we realized that they really had a very interesting and efficient arrangement," said Seabold, now retired.

Tasks that practicing optometrists had had to shoulder as volunteers, such as manning the registration tables at conventions, were taken over by Shaner's staff. "One of the reasons we did it was because we were having difficulty getting the manpower to do certain things," Seabold notes.

Large groups can afford to hire their own raft of experts. But a group with a yearly budget below $2 million will probably get more expertise for the buck with an association management company, said Mitch Lebovic, executive director of the Maryland Society of Association Executives, whose members include both direct employees of associations and a handful of association management companies.

Pooling resources

The idea is akin to pooling resources with other groups to share an executive, an accountant, a marketer and other specialists.

"I bring a staff of 13 to them," said Shaner, president of the Joseph E. Shaner Co., which has 15 clients. "I'm the wagon master - you need to tell me where you're going, and if you tell me where you're going, I've got the trails to get you there."

That's mostly invisible to outside eyes. Shaner is "executive director" or "executive vice president" of the groups whose management he takes the lead on. The tail end of his e-mail address - @assnhqtrs.com - gives a rare hint to eagle eyes that he's not their full-time employee.

"We want people to call here and just think they've called their association," Shaner said.

His fees vary based on how much a group wants, but the minimum for new clients is $2,000 a month - $24,000 annually. His largest organization pays more than $250,000 a year.

`I do what?'

Shaner got into the field by chance. He started a public relations company in 1974, and his second client happened to be an association that also wanted him to keep its membership records. Word spread that he did association management. His response: "I do what?"

He tells the story with amusement now. The more he managed, the better he liked it.

Constance Row, on the other hand, got into the field on purpose, looking for personal fulfillment after retiring from health care administration. Her Edgewood-based Row Associates LLC manages two groups, the American Academy of Home Care Physicians and the National Academies of Practice. She said she charges less than the norm because the groups are promoting causes near to her heart.

"At this point in my career, I'm able to give them more on a semi-volunteer basis than they would be able to afford if they had to do it on the open market," Row said.

The Professional Grounds Management Society, interviewing for a new executive in 2000, was sold on the concept of association management when it realized the result was cheaper. It wouldn't have the expense of its own office and all the related equipment anymore.

`Economy of scale'

But the group does have some things now that it didn't before. An 800 number with its initials as the last four digits. An online chat room on a juiced-up Web site. A presence at trade shows that grounds managers might attend, to help recruit new members.

"There's an economy of scale by sharing those services with other organizations similar to ours," said Kevin O'Donnell of Villanova University in Pennsylvania, who was president of the society when it hired Shaner. "But more importantly, the level of service was much higher."


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